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MPAA: Rising DVD Penetration at VHS Expense

26 Mar, 2004 By: Erik Gruenwedel

Despite comments last week at ShoWest from Motion Picture Association of America (MPAA) CEO Jack Valenti that home video “is just not the same as the emotional alchemy [found] in a movie theatre,” statistics released by the MPAA indicate an ever-growing DVD market.

With nearly 47 million U.S. households owning a DVD player at the end of 2003 — up 20.3 percent from the previous year — the average retail price of a DVD title dropped 67 cents, to $20.15, according to MPAA figures just released.

The MPAA data cited Internet penetration reaching 62.2 million U.S. households, up more than 12 percent from 55.4 million households in 2002. Broadband reached 21.7 million households, an increase of 34 percent from 15.9 million homes in 2002.

The lower DVD price, which was based on domestic inventory of 29,000 titles available — up 45 percent from 2002 — in part helped the industry sell through more than 985 million units in 2003, a 51 percent increase from 650.6 million units in 2002.

DVD players, with shipments to retailers surpassing 21.9 million units in 2003, saw average unit prices fall 13 percent, to $122, from $140 in 2002. DVD rentals topped nearly 111 million units in 2003, up almost 40 percent from the previous year, according to data from the MPAA.

By comparison, the mature VHS market, in which VCR growth remained stagnant at 90.8 percent household penetration in 2003, saw sellthrough of VHS titles drop almost 42 percent, to 240.4 million, from 407.5 million in 2002. VHS rentals fared only slightly better, falling almost 23 percent, to 53.2 million units, from 73.6 million in 2002.

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